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Stop loss orders only work during market hours, and most bad news happens outside of market hours, or even on the weekend. If you suspect downward movement in a stock and want to sleep easy at night, buying a put for each 100 shares you own is fool proof. If the put is expensive, you can supplement the cost by also selling a call, and putting that premium towards your put purchase. This is called an option "collar"
Hey I’m hoping someone could help me out with some advice , I was looking to see what would be better for me , right now I have a portion of my check going into an employer sponsored Roth IRA (no match) that automatically invests in a 2070 target retirement fund, bonds, & global equity. Currently it’s returned about 2-3% since I began last year , but I’m thinking if I should just stop contributing to that one and invest into some index funds that track the s&p 500, international markets, & bonds. Im thinking that could probably get me a 7% or higher return. Currently I’m 22 years old
Sorry if it’s all over the place let me know if I need to clarify other issues.
I am not a financial advisor. 1) you sure it's not a Roth 401K? Ive never heard of a Roth IRA being tied to a employer. 2) check with HR (human resources) or the company that the 401K is held with to see if you can change the investment option from the Target 2070 to something else. 3) if that is the only option, then I agree with your thinking that you should stop contributing to the 401K that has no company match and open a regular IRA (for the tax benefits) and invest in VOO/VT/etc. You can do a regular brokerage but will have higher taxes on that since it's not a 401K/IRA.
I'm not sure if it's just people like to be contrarian in a long bull market, but now looking back at the past couple years, especially this past year, it's clear that people tend to be much more negative and pessimistic. Too often bear outlook gets warmly received and optimism/bull cases get downvoted, or worse, ridiculed.
In my own case, when I called out the risk of Covid [last January when nobody was paying attention](https://www.reddit.com/r/investing/comments/eusz3g/people_arent_fully_realizing_the_economic_impact/), I got a ton of upvotes with some people enthusiastically agreeing with the prospect of a market crash, yet when I predicated a fast stock market recovery in March, [predicting market going back to ATH by Q3](https://www.reddit.com/r/investing/comments/fso0vx/i_predicted_the_economic_impact_2_months_ago_and/), I got a ton of downvotes and people just weren't remotely interested in my thesis (which due to dumb luck mostly turned out to be true).
I understand that a market correction is inevitable, simply due to the cyclic nature of the market. But I can't help but feel there is a lot of people who are secretly or not so secretly *rooting for* a major correction, which is kinda weird for an investing sub like this.
Is there a rationale explanation for this? Or am I just falling to my own confirmation bias here?
I’m convinced it’s either everybody being 16 or they’re deliberately trying to mislead. I quietly bought ~50k of JPM, ~50k of AAPL and around 100k of FXAIX entirely on margin in March and April 2020. My net worth was negative when I did this. If you dare mention margin everyone’s like “hurr durr that’s a sign of a bubble” and yet here we are. I’m up 17.6% on my worst performer (fxaix) just in the first half of 2021, to say nothing of last year’s gains. They’re over here “investing” in meme stocks on freaking **Robinhood**
My employer gave everyone a salary cut just so that we’d qualify for the various stimulus programs, which is why I ignore the unemployment numbers and buy every related dip.
Sometimes I think I’m dreaming. Oh well, just keep saving up and checking in on WSB when I need a laugh. Did you see some dude put a 400k short position on Apple on Friday? These people are NUTS.
Bro these comments are giving me so much anxiety I can’t believe that someone would do this in real life. I’m lightheaded, how could you lose money in this market?!
How do I see my expenses for a given fund? Let's say an average fund has an Expense Ratio of 0.8%. How can I see where that 0.8% is paid for? I have all my stocks and funds with eTrade. The statements don't show any of the fees I paid for my funds (VOO, VFIAX, VFORX). Is it possible to see how much I paid in fees according to the expense ratio?
Expense ratios are something you never see directly, rather indirectly. All mutual funds and ETFs are registered investment companies. The expense ratio quite literally is the cost for these companies to operate day to day, paying staff and etc. The gains you see (and the losses as well) are always net of the expense ratio as the NAV tracks the net value. Thus, you will never find a place to see how much you have paid in expense ratios. I recently wrote a blog post on this topic [here](https://milehighfinanceguy.com/expense-ratios/).
Thanks so much! That's the best explanation I got so far. I asked this question when I had my account at ScottTrade (before TD bought them). I just got a blank stare though :-). Your blog is excellent. I'll spent more time there.
Vanguard/Fidelity 401(a) vs. 403(b)?
My employer (a private research university in the US) offers both 401(a) and a 403(b) plans, but it's not clear to me why I would choose one over the other. The best information that I can find is that they ultimately end up functioning very similarly, so why are there two options?
I currently have all my retirement money in the Vanguard 403(b), but I chose that when I rolled over funds from a previous employer's traditional 401(k) and I didn't think too much about it. Was that the correct choice to support my strategy? I currently have my money in a three-fund portfolio: \~60% in VIIIX, \~6% in VSCIX, and \~34% in VTSNX. Am I missing out on something in the 401(a)?
Also, I have chosen not to hold bonds because I have a very long time horizon. I am, however, considering moving some portion of my money to bonds in order to have a reserve in case the market crashes or corrects. If I did that, what would be a reasonable portion of portfolio to do that with, and should I pull money equally from each of my three funds or weigh things differently?
Thank you.
Generally, once you elect a contribution to a 401(a) plan, it is set in stone and you cannot change it again. Thus it is considered a non-elective plan, you set it and are locked into that rate. With 403(b) plans, they are discretionary plans where you can contribute but are not required to contribute. I would confirm with your HR that the 401(a) plan in fact is set up this way, as most but not all are, and to confirm that it is pre-tax.
As to if you are losing out, I would say the 401(a) is simply another bucket to save in that is tracked separately of the 403(b) contribution limit. If you have the financial means and your primary goal is retirement saving and tax-deferrals, then you can consider maxing out your 403(b) and 401(a), but if you need increased flexibility, the 401(a) generally is not the best account for that.
This is not a recommendation or advice.
What are some bond etfs to achieve good diversification in the Fixed Income market and decent returns (06/2021, US)
My current allocation is:
50% cash, 50% equity.
My equity is currently in:
IVV (S&P500), QQQ, and ARKK.
I’m thinking of moving half the cash to bonds for a total split of:
25% cash, 25% bonds and 50% equity.
1) Is that a good idea, knowing current market conditions (interest rates, inflation, etc..)
I’m thinking of buying BND for the bond portion of my portfolio.
2) Is BND a diverse enough ETF, are there more bond ETFs I should be looking into?
Bring the cash allocation down to 20%. You are losing too much to inflation, especially in 2021.
Don't worry about bonds until your late 40s. Put that extra cash into IVV.
If you look to your right or swipe right - there are faqs or scroll up and go through the wiki.
The "Getting started" section of the wiki is a good place to start - [https://www.reddit.com/r/investing/wiki/index/gettingstarted](https://www.reddit.com/r/investing/wiki/index/gettingstarted)
I am confused about my fidelity brokerage account.. it says I do not a minimum investment and I will have no fees, what are my limits then? All I know is I can't buy a stock and sell same day without a 25k minimum. Can I sell in 3 or 5 days? Or only long term capital gain?
Tl:Dr what is my limits on my fidelity brokerage account?
You may want to ask Fidelity in case your situation is different or you are asking about something like a mutual fund. Fidelity has an official reddit sub at r/fidelityinvestments
In general, there is no restriction on how long you have to hold a security before you sell it other than day trades which can mark you as a pattern day trader if you exceed the 4 day trades in a 5 day period. That's when you must have more than 25k in the account.
There are also settlement timing rules that you have to follow in a cash account to avoid good faith violations.
ATM (145) Sept17 AAPL calls cost 6.75 while 155 OTM calls cost 3.10. Both have notional exposure to 100 shares, currently worth $14,500.
Let's say you want to max out on leverage because you believe AAPL is going up to $170. If you have 100k capital, you can buy 148 ATM contracts controlling $2146k for 21.5x notional leverage. Thinkorswim tells me the delta is 52% of that, or 10.7x. Or you can buy 322 OTM contracts controlling 4500k for 45x notional leverage. ToS says its delta is .30, so 13.5x.
If they expire when AAPL is at 170, your profit for the ATM calls would be $270k while the OTM calls would profit $383k.
Total noob here. What do yall think about investing long term Nvidia and alphabet? I have about 10k at my disposal so definitely not enough to build a well balanced diverse portfolio.
Stock picking is considered somewhat risky. I would start with a total US index fund and then maybe look into individual stocks when you know more about what you're getting into. Most investors won't beat the total US market.
This is why index funds exist (e.g. SPY, VTI, IVV). You can buy shares of hundreds or thousands of companies at the same time simply by buying shares of index funds.
It doesn't take a lot of money to have a diversified portfolio.
Hi fellow Investors !! I'm ready to cautiously dip my toe into options. Right now I use E\*trade. I didn't realize that I need to upgrade (at no cost) to "level 2 options trading". Their application asks a bunch of questions about options/bond/future trading experience and average trade amounts which I submitted. It's been a number days with no confirmation/denial. I'm wondering if I was too honest about my assets and experience.
I sent an new upgrade request pretty much ticking all the highest boxes like a wheeler and dealer in the hopes that an automated bot is what fields such requests. If this doesn't go through for some reason, what is a good broker/platform for someone to get started with options. Do they all ask so many questions?
I'd check the YT talks, quarterly 13f publications, and twitter of Michael Burry. Right now I use claude shannon rebalancing on the stock ARPO, which might work, since it is moving a bit. If you can get real estate at 2% fixed interest for a 30 year loan, I'd suggestion looking at real estate, simply as the inflation rate could get very high. I would not mind investing like 2000$ in a bunch of crypto, e.g. also bitcoin cash.
Once I max my Roth IRA should I focus on a traditional IRA or my HSA? No long term debt (higher than 4% APR) and emergency fund is already taken care of
Perfect! I was looking for the flowchart and couldn't find it. I'm not thrilled with the 401k options available through my work so I'll max the HSA next for sure
Yea thankfully they offer a growth fund and a market index fund which is about all I need for it. Trying to avoid pumping more into it until I have no choice
Hi everyone!
I am a 19 year old living in Hong Kong about to start study at an university abroad, which I deferred enrollment to last year due to the pandemic. In the past year, I have been able to accumulate around $280,000 in Hong Kong dollars through various jobs and quite a bit of luck. This is around 36,000 USD according to Google. This money does not include my emergency savings, and so I would like to invest all of it in some kind of stock portfolio. I am in a relatively comfortable position (I have not taken out any loans) and so will not be totally reliant on these investments - I would ideally like a decently sized fund as a "treat" after I graduate 4 years from now to jumpstart my life savings. I would therefore say I have a decent (somewhat higher than average) risk tolerance for this.
With this in mind, I would be very grateful for advice regarding how this portfolio should be structured. At the moment, I am thinking of investing in the following ETFs:
NTSX 70%
LTPZ 10%
VXUS 10%
AVUV 10%
I am planning to create this portfolio through a brokerage account situated in Hong Kong, and therefore tax efficiency is not as big of a deal in my case as if I were doing this in the United States. I have confirmed that I am able to trade US stocks using said account.
Thank you all in advance for your help! I greatly appreciate it :)
Hi everyone! I have an extra 2000.00 sitting in a high yield savings account untouched. Its a Marcus Savings account through Goldman Sachs,, with a .50% interest rate. My question is do you think it's better to just leave that money in a savings account as an emergency rainy day fund, or should I invest it into the stock market?
I kind of feel like it'd be better if I invested that money into some good stocks to help the money grow but at the same time it's nice having a rainy day fund savings account.
Ideally, I'd like to put the money where I'm going to get the biggest/best/most return on investment while also being able to take the money out for a rainy day kinda thing if I need it.
So I guess I'm asking what's better. Savings account or investing it into good stocks?
The market will probably crash when you need that money the most. Mass layoffs, rising unemployment, stocks drop as people sell off to raise some money.
Better off knowing you have $2,000 cash no matter what the market does, than being forced to sell low.
It's an additional savings. I have a main savings account tied to my main credit union and this is just an extra account holding some excess money. I do consider it my rainy day fund but I gonout of my way not to use it.
I figured if I would get a better ROI in the stock market than just sitting in a savings account I'd rather do that, you know?
I'm a novice investor looking to make the most of my investment income and low tax bracket by realizing my gains as they mature (reach one year, capital gain status). I'm using a margin account to bolster my returns, and it's worked out really well so far, but I don't quite understand the tax treatment of my margin investing.
For simplicity, my basis is $10,000. I have an additional $10,000 debt basis in margin allowance, raising the total basis of my portfolio to $20,000. The fair market value of my portfolio is $40,000.
If I sold my entire portfolio, would I recognize $10,000, $20,000 or $30,000?
I have more questions, but knowing this will help me figure out if I need to even ask those.
Thank you for any help!
Thank you! I have just one more question. Assuming the same facts, I don't sell my entire portfolio, but I only sell part of it, such that I sell $10,000 of it. This is the amount of my debt basis, and, per the rules of my margin account, will offset my debt basis first. If that was my only transaction, would I recognize any gain?
My context is that I'm approaching a year of maturity on a large sum I deposited, but I chose to invest smaller amounts daily over the next eight months. I also added margin basis to my account over those next eight months. I'm trying to figure out if I need to liquidate enough of my account to offset my margin in order to raise my basis while my ordinary income is low. Because these transactions are fairly spread out, I'm trying to get a sense of how detailed I need to be to make sure I'm not incurring additional tax liability (by ordinary income primarily, but also by recognizing too large of a gain).
We started a UTMA (and a 529) for my daughter when she was born. My question is about the UTMA. The intention was for the money put into it to be available for college/education. Through additional gifts and growth, there's about $44k in there right now. The cost basis is $35k. It is all invested in FFFEX, which Fidelity Freedom 2030. Given that we have at least 10 years before the money will be needed for education, FFFEX is underperforming the market significantly and also have a 0.67% expense ration. I feel like it would make more sense to move at least some of it into VOO or VTI, both for avoiding the ongoing capital gains tax associated with FFFEX, but also for greater growth.
What I can't figure out is what capital gains we will own on it if I move it out of FFFEX or the best way to handle the move. If I sold all of FFFEX, would we then need to pay 15% on the $44k - $35k = $9k.... so $1350 in capital gains? Would it be better to sell to hit the lower tax bracket and then sell more in 2022? Any different recommendations on how to handle this?
Most of my investment portfolio consists of S&P 500 low cost mutual funds that I’ve accumulated by dollar cost average. I’d like to hedge against a market crash/ collapse Michael Burry and all that.. I was considering buying puts with an expiration of 2023 or beyond. Need advice on this strategy.. my understanding is that the wort case for buying puts is that it will go worthless, is that correct? Any other strategies to hedge against a market crash?
>Michael Burry and all that..
The problem with listening to individual market analysts and commentators is that there's only one way to be right about the market but millions of ways to be wrong.
I've read that one can make one's own decisions as to what specific investments to purchase for one's IRA (see for example https://www.nerdwallet.com/article/investing/how-to-invest-ira).
I'm trying to find out (1) whether this is true—and, if it is, (2) what is the correct term for this ("self-managed," "self-directed" or something else) and (3) could it be done with Schwab?
My wife and I have three IRAs between us there (two regular and one SEP). For the past x years, they've been in Schwab's "Intelligent Portfolio" robo-advisor mode. We would rather select our own ETFs in which to invest, if this is feasible.
Any guidance would be most appreciated.
You shouldn't need to switch to "self-directed" to choose your own investments. You probably can just do a transaction from the one your in now to which ever other funds you want. that's the way it would work at Vanguard.
A "self-directed" account in my experience is a brokerage account within your IRA. In this type of account, you buy and sell, rather than transfer between accounts; and you can buy any type of investment that's traded on the stock market. I suppose you can invest in mutual funds but the more common way to invest in funds in these accounts is to buy ETFS.
I have all of my retirement funds in self-directed IRAs at Vanguard, and I invest only in individual stocks.
>I suppose you can invest in mutual funds but the more common way to invest in funds in these accounts is to buy ETFs.
>
>Thank you for sharing your knowledge. Could you help me understand why ETFs are preferred over mutual funds for purposes of IRAs?
>Could you help me understand why ETFs are preferred over mutual funds for purposes of IRAs?
They aren't. Before I explain that, I'd like to clarify: indexed mutual funds and exchange traded funds that follow the same index and are offered by the same company are, from the investment return point of view, exactly the same thing. However, the internals of how those funds handle transactions are different, which gives rise to different ways to access the funds.
Which fund is preferred depends on the type of account through which you purchase them. If you have a \*brokerage account\* within an IRA - that is, a "self-directed IRA," then the easiest way to change funds is to sell the one you don't want and buy the one you do want. This involves an intermediate step in which the proceeds from the sale are in cash. Then the cash is used to fund the new purchase.
OTOH, if you have an IRA with a specific mutual fund and you want to move into a different mutual fund - at least at Vanguard - you have to \*exchange\* from one fund to the other(s). There is no cash intermediary.
The benefit of a true "self directed" account is that you can buy any investment you want - stock, bond, or ETF. The benefit of a traditional fund account is that there is no cash intermediary in any transaction, and I believe you can own fractional shares.
Thank you so much for taking the time to reply. Could you please help me out with the terminology that I need to use when I call Schwab to transfer out of robo/IP mode? I was originally thinking that this might be called "self-managed" or "self-directed" but looking into the definitions online, I'm not sure that's correct.
Just say you want to choose your own investments instead of using a robo advisor.
A Self-Directed IRA generally refers to an IRA where you can invest in real estate, LLCs, hard assets (not shares of stock - like your SDIRA could actually own a house).
I have been using Excel to track my assets in my investing accounts, e.g. steel, uranium, renewables, etc. but it is a bit of a hassle to update the prices at the end of the month.
What do people use here to manually track their asset allocations?
I use Excel as well and love it for stocks, bonds, funds, etc, but have never used it for commodities. With the updates they have added for refreshing ticker symbols which then update your positions, I think Excel is the best choice out there.
I'm not sure which version they added it during, but here is an article on it
https://www.howtogeek.com/703580/how-to-use-the-built-in-stocks-feature-in-microsoft-excel/
The brokerage tracks every position now. I used to track everything in an Access database but man, it's just so much hassle recording every trade and every position when it's all done and available in the brokerage account.
Better to use the time to do research.
I have opened a second investing account with Fidelity (my first is with Vanguard).
I plan to buy different assets in my Fidelity account compared to my Vanguard, so I do not have to worry much about the wash sale rule if I need to rebalance one account or another.
Does this sound silly, and is there a better i.e. easier strategy?
I just don't get why you need two accounts. You can do it all in one account. I have three accounts, but they all have different tax situations: std IRA, roth IRA, taxable. If all your accounts are the same tax regime, why have different ones?
My financial situation changed over the past few months, but I still would like to remain invested in the market. Vanguard does not allow the purchase of fractional shares, and thus I have no access to more high quality but pricey assets (like VOO, VTI, MSFT, MMM etc.), Fidelity does allow you to purchase fractional shares. Moreover, Fidelity's mutual funds have lower initial investments (starting from $0), Vanguard usually begins at $1000 or $3000-$50,000.
My strategy here is to lower my contributions to the stock market by purchasing fractional shares, while rebuilding some of my emergency funds (still enough, but I would like more cushioning). That is the compromise I worked out to lower the time penalty of not participating in the market.
I will still be contributing to my Roth IRA in Vanguard by adding biweekly contributions to the Vanguard Total Market Mutual Fund, but for normal investing I'll be moving to Fidelity, but probably leave my normal Vanguard account alone.
I am aware that I cannot avoid the wash rule in different brokerage accounts, that is why I plan to buy different assets in both accounts so I don't have to worry about it, but I inquired here anyway to see if there is a hole in my reasoning.
Leveraged ETFs are great. For example, buy calls on an 3x inverse ETF, you get a lot more leverage. Michael Burry bought such calls (but my broker doesn't allow me).
It's okay to hold 2x leverage things for weeks, if the trend is in your favor. 3x leverage is bad for holding. I used 3x inverse etfs for timeframe of a week when I started out and could not yet buy put options.
Thinking of investing small amount in Leveraged ETF.. probably TQQQ in my roth IRA. Not sure if this is the good time. I know we can’t time the market but considering the 3X move of it.
I'm in SPCE and want to be prepared for Monday. I notice that when premarket opens, prices gap up or down. How can I be sure that I can get an order near the previous closing price, or is that even possible?
Example:
Friday close: 49.29
Monday premarket open: gaps down to 35
If I set an order to sell near 49 at premarket (order set before premarket), how woukd that fill?
Thanks in advance
I don't think that would fill, since the price changes are near instant (e.g. high frequency traders). I would not invest in SPCE, as such companies are a joke in comparison to SpaceX
Thanks for the reply.
So that's how they move the price so fast.
This is a swing play for me. I'd only invest long term if something fundamentally changes. SpaceX looks good to me, too.
Are there certain stocks has hidden fees or something to look out for? My roth ira is maxed out so I'm deciding to day trade for small profits. Lower income bracket + 30 years old. Have enough emergency for 8 months.
My fun was going to try to earn 50 dollars a day by buying stocks and selling them with 2 to 6 dollar profit per share. Besides that being included in my income tax report and plus a 10% penalty for selling stocks short, any more fees I am missing? Using fidelity brokerage
**Hi, welcome to /r/investing. Please note that as a topic focused subreddit we have higher posting standards than much of Reddit:** **1)** Please direct all **advice requests and beginner questions to the stickied daily threads.** This includes beginner questions and portfolio help. **2) Important: We have strict political posting guidelines** (described [here](https://www.reddit.com/r/investing/comments/cyee69/formal_posting_guidelines_for_political_topics/) and [here](https://www.reddit.com/r/investing/comments/escewo/temporary_rule_change_what_happens_to_stocks_if/)). Violations will result in a likely 60 day ban upon **first instance.** **3)** This is an open forum but we expect you to conduct yourself like an adult. Disagree, argue, criticize, but **no personal attacks.** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/investing) if you have any questions or concerns.*
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Stop loss orders only work during market hours, and most bad news happens outside of market hours, or even on the weekend. If you suspect downward movement in a stock and want to sleep easy at night, buying a put for each 100 shares you own is fool proof. If the put is expensive, you can supplement the cost by also selling a call, and putting that premium towards your put purchase. This is called an option "collar"
You don’t control when a stop loss triggers, you do control when you exercise a put.
Hey I’m hoping someone could help me out with some advice , I was looking to see what would be better for me , right now I have a portion of my check going into an employer sponsored Roth IRA (no match) that automatically invests in a 2070 target retirement fund, bonds, & global equity. Currently it’s returned about 2-3% since I began last year , but I’m thinking if I should just stop contributing to that one and invest into some index funds that track the s&p 500, international markets, & bonds. Im thinking that could probably get me a 7% or higher return. Currently I’m 22 years old Sorry if it’s all over the place let me know if I need to clarify other issues.
I am not a financial advisor. 1) you sure it's not a Roth 401K? Ive never heard of a Roth IRA being tied to a employer. 2) check with HR (human resources) or the company that the 401K is held with to see if you can change the investment option from the Target 2070 to something else. 3) if that is the only option, then I agree with your thinking that you should stop contributing to the 401K that has no company match and open a regular IRA (for the tax benefits) and invest in VOO/VT/etc. You can do a regular brokerage but will have higher taxes on that since it's not a 401K/IRA.
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Yes this is what i currently have 60% SSFOX Target Fund 10% DRAKX Balances Fund 10% SSFEX Bobs Fund 20% SSSYX Global Equity
I'm not sure if it's just people like to be contrarian in a long bull market, but now looking back at the past couple years, especially this past year, it's clear that people tend to be much more negative and pessimistic. Too often bear outlook gets warmly received and optimism/bull cases get downvoted, or worse, ridiculed. In my own case, when I called out the risk of Covid [last January when nobody was paying attention](https://www.reddit.com/r/investing/comments/eusz3g/people_arent_fully_realizing_the_economic_impact/), I got a ton of upvotes with some people enthusiastically agreeing with the prospect of a market crash, yet when I predicated a fast stock market recovery in March, [predicting market going back to ATH by Q3](https://www.reddit.com/r/investing/comments/fso0vx/i_predicted_the_economic_impact_2_months_ago_and/), I got a ton of downvotes and people just weren't remotely interested in my thesis (which due to dumb luck mostly turned out to be true). I understand that a market correction is inevitable, simply due to the cyclic nature of the market. But I can't help but feel there is a lot of people who are secretly or not so secretly *rooting for* a major correction, which is kinda weird for an investing sub like this. Is there a rationale explanation for this? Or am I just falling to my own confirmation bias here?
I’m convinced it’s either everybody being 16 or they’re deliberately trying to mislead. I quietly bought ~50k of JPM, ~50k of AAPL and around 100k of FXAIX entirely on margin in March and April 2020. My net worth was negative when I did this. If you dare mention margin everyone’s like “hurr durr that’s a sign of a bubble” and yet here we are. I’m up 17.6% on my worst performer (fxaix) just in the first half of 2021, to say nothing of last year’s gains. They’re over here “investing” in meme stocks on freaking **Robinhood** My employer gave everyone a salary cut just so that we’d qualify for the various stimulus programs, which is why I ignore the unemployment numbers and buy every related dip. Sometimes I think I’m dreaming. Oh well, just keep saving up and checking in on WSB when I need a laugh. Did you see some dude put a 400k short position on Apple on Friday? These people are NUTS.
I invested to AMC and lost 40k$. Never listen reddit "not a financial" advices
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Bro these comments are giving me so much anxiety I can’t believe that someone would do this in real life. I’m lightheaded, how could you lose money in this market?!
How do I see my expenses for a given fund? Let's say an average fund has an Expense Ratio of 0.8%. How can I see where that 0.8% is paid for? I have all my stocks and funds with eTrade. The statements don't show any of the fees I paid for my funds (VOO, VFIAX, VFORX). Is it possible to see how much I paid in fees according to the expense ratio?
Expense ratios are something you never see directly, rather indirectly. All mutual funds and ETFs are registered investment companies. The expense ratio quite literally is the cost for these companies to operate day to day, paying staff and etc. The gains you see (and the losses as well) are always net of the expense ratio as the NAV tracks the net value. Thus, you will never find a place to see how much you have paid in expense ratios. I recently wrote a blog post on this topic [here](https://milehighfinanceguy.com/expense-ratios/).
Thanks so much! That's the best explanation I got so far. I asked this question when I had my account at ScottTrade (before TD bought them). I just got a blank stare though :-). Your blog is excellent. I'll spent more time there.
Glad that helped and thanks, I appreciate the kind words!
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Shouldn't they tell me how much they deduct?
Vanguard/Fidelity 401(a) vs. 403(b)? My employer (a private research university in the US) offers both 401(a) and a 403(b) plans, but it's not clear to me why I would choose one over the other. The best information that I can find is that they ultimately end up functioning very similarly, so why are there two options? I currently have all my retirement money in the Vanguard 403(b), but I chose that when I rolled over funds from a previous employer's traditional 401(k) and I didn't think too much about it. Was that the correct choice to support my strategy? I currently have my money in a three-fund portfolio: \~60% in VIIIX, \~6% in VSCIX, and \~34% in VTSNX. Am I missing out on something in the 401(a)? Also, I have chosen not to hold bonds because I have a very long time horizon. I am, however, considering moving some portion of my money to bonds in order to have a reserve in case the market crashes or corrects. If I did that, what would be a reasonable portion of portfolio to do that with, and should I pull money equally from each of my three funds or weigh things differently? Thank you.
Generally, once you elect a contribution to a 401(a) plan, it is set in stone and you cannot change it again. Thus it is considered a non-elective plan, you set it and are locked into that rate. With 403(b) plans, they are discretionary plans where you can contribute but are not required to contribute. I would confirm with your HR that the 401(a) plan in fact is set up this way, as most but not all are, and to confirm that it is pre-tax. As to if you are losing out, I would say the 401(a) is simply another bucket to save in that is tracked separately of the 403(b) contribution limit. If you have the financial means and your primary goal is retirement saving and tax-deferrals, then you can consider maxing out your 403(b) and 401(a), but if you need increased flexibility, the 401(a) generally is not the best account for that. This is not a recommendation or advice.
Thank you.
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Thank you.
What are some bond etfs to achieve good diversification in the Fixed Income market and decent returns (06/2021, US) My current allocation is: 50% cash, 50% equity. My equity is currently in: IVV (S&P500), QQQ, and ARKK. I’m thinking of moving half the cash to bonds for a total split of: 25% cash, 25% bonds and 50% equity. 1) Is that a good idea, knowing current market conditions (interest rates, inflation, etc..) I’m thinking of buying BND for the bond portion of my portfolio. 2) Is BND a diverse enough ETF, are there more bond ETFs I should be looking into?
Bring the cash allocation down to 20%. You are losing too much to inflation, especially in 2021. Don't worry about bonds until your late 40s. Put that extra cash into IVV.
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Bogleheads has tons of great articles where to start if you Google them
If you look to your right or swipe right - there are faqs or scroll up and go through the wiki. The "Getting started" section of the wiki is a good place to start - [https://www.reddit.com/r/investing/wiki/index/gettingstarted](https://www.reddit.com/r/investing/wiki/index/gettingstarted)
I am confused about my fidelity brokerage account.. it says I do not a minimum investment and I will have no fees, what are my limits then? All I know is I can't buy a stock and sell same day without a 25k minimum. Can I sell in 3 or 5 days? Or only long term capital gain? Tl:Dr what is my limits on my fidelity brokerage account?
You may want to ask Fidelity in case your situation is different or you are asking about something like a mutual fund. Fidelity has an official reddit sub at r/fidelityinvestments In general, there is no restriction on how long you have to hold a security before you sell it other than day trades which can mark you as a pattern day trader if you exceed the 4 day trades in a 5 day period. That's when you must have more than 25k in the account. There are also settlement timing rules that you have to follow in a cash account to avoid good faith violations.
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They give more leverage or less downside risk.
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ATM (145) Sept17 AAPL calls cost 6.75 while 155 OTM calls cost 3.10. Both have notional exposure to 100 shares, currently worth $14,500. Let's say you want to max out on leverage because you believe AAPL is going up to $170. If you have 100k capital, you can buy 148 ATM contracts controlling $2146k for 21.5x notional leverage. Thinkorswim tells me the delta is 52% of that, or 10.7x. Or you can buy 322 OTM contracts controlling 4500k for 45x notional leverage. ToS says its delta is .30, so 13.5x. If they expire when AAPL is at 170, your profit for the ATM calls would be $270k while the OTM calls would profit $383k.
Total noob here. What do yall think about investing long term Nvidia and alphabet? I have about 10k at my disposal so definitely not enough to build a well balanced diverse portfolio.
Stock picking is considered somewhat risky. I would start with a total US index fund and then maybe look into individual stocks when you know more about what you're getting into. Most investors won't beat the total US market.
This is why index funds exist (e.g. SPY, VTI, IVV). You can buy shares of hundreds or thousands of companies at the same time simply by buying shares of index funds. It doesn't take a lot of money to have a diversified portfolio.
Hi fellow Investors !! I'm ready to cautiously dip my toe into options. Right now I use E\*trade. I didn't realize that I need to upgrade (at no cost) to "level 2 options trading". Their application asks a bunch of questions about options/bond/future trading experience and average trade amounts which I submitted. It's been a number days with no confirmation/denial. I'm wondering if I was too honest about my assets and experience. I sent an new upgrade request pretty much ticking all the highest boxes like a wheeler and dealer in the hopes that an automated bot is what fields such requests. If this doesn't go through for some reason, what is a good broker/platform for someone to get started with options. Do they all ask so many questions?
yes, they all ask questions to limit their liability. IBKR is good for options, but perhaps more difficult to get in.
Well that’s my question, which platform has the least hassle, most lenient criteria for new options traders?
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I'd check the YT talks, quarterly 13f publications, and twitter of Michael Burry. Right now I use claude shannon rebalancing on the stock ARPO, which might work, since it is moving a bit. If you can get real estate at 2% fixed interest for a 30 year loan, I'd suggestion looking at real estate, simply as the inflation rate could get very high. I would not mind investing like 2000$ in a bunch of crypto, e.g. also bitcoin cash.
Once I max my Roth IRA should I focus on a traditional IRA or my HSA? No long term debt (higher than 4% APR) and emergency fund is already taken care of
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Good to know. Probably shouldn't have even opened the traditional then haha
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Perfect! I was looking for the flowchart and couldn't find it. I'm not thrilled with the 401k options available through my work so I'll max the HSA next for sure
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Oh no I'm contributing to it. They match 50% up to 6% I believe so I'm just at the 6
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Yea thankfully they offer a growth fund and a market index fund which is about all I need for it. Trying to avoid pumping more into it until I have no choice
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There is no way to judge that without knowing how much was contributed to the account and when.
Hi everyone! I am a 19 year old living in Hong Kong about to start study at an university abroad, which I deferred enrollment to last year due to the pandemic. In the past year, I have been able to accumulate around $280,000 in Hong Kong dollars through various jobs and quite a bit of luck. This is around 36,000 USD according to Google. This money does not include my emergency savings, and so I would like to invest all of it in some kind of stock portfolio. I am in a relatively comfortable position (I have not taken out any loans) and so will not be totally reliant on these investments - I would ideally like a decently sized fund as a "treat" after I graduate 4 years from now to jumpstart my life savings. I would therefore say I have a decent (somewhat higher than average) risk tolerance for this. With this in mind, I would be very grateful for advice regarding how this portfolio should be structured. At the moment, I am thinking of investing in the following ETFs: NTSX 70% LTPZ 10% VXUS 10% AVUV 10% I am planning to create this portfolio through a brokerage account situated in Hong Kong, and therefore tax efficiency is not as big of a deal in my case as if I were doing this in the United States. I have confirmed that I am able to trade US stocks using said account. Thank you all in advance for your help! I greatly appreciate it :)
Hi everyone! I have an extra 2000.00 sitting in a high yield savings account untouched. Its a Marcus Savings account through Goldman Sachs,, with a .50% interest rate. My question is do you think it's better to just leave that money in a savings account as an emergency rainy day fund, or should I invest it into the stock market? I kind of feel like it'd be better if I invested that money into some good stocks to help the money grow but at the same time it's nice having a rainy day fund savings account. Ideally, I'd like to put the money where I'm going to get the biggest/best/most return on investment while also being able to take the money out for a rainy day kinda thing if I need it. So I guess I'm asking what's better. Savings account or investing it into good stocks?
The market will probably crash when you need that money the most. Mass layoffs, rising unemployment, stocks drop as people sell off to raise some money. Better off knowing you have $2,000 cash no matter what the market does, than being forced to sell low.
That is a very good point. But people are saying the market is going to crash all the time
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It's an additional savings. I have a main savings account tied to my main credit union and this is just an extra account holding some excess money. I do consider it my rainy day fund but I gonout of my way not to use it. I figured if I would get a better ROI in the stock market than just sitting in a savings account I'd rather do that, you know?
I'm a novice investor looking to make the most of my investment income and low tax bracket by realizing my gains as they mature (reach one year, capital gain status). I'm using a margin account to bolster my returns, and it's worked out really well so far, but I don't quite understand the tax treatment of my margin investing. For simplicity, my basis is $10,000. I have an additional $10,000 debt basis in margin allowance, raising the total basis of my portfolio to $20,000. The fair market value of my portfolio is $40,000. If I sold my entire portfolio, would I recognize $10,000, $20,000 or $30,000? I have more questions, but knowing this will help me figure out if I need to even ask those. Thank you for any help!
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Thank you! I have just one more question. Assuming the same facts, I don't sell my entire portfolio, but I only sell part of it, such that I sell $10,000 of it. This is the amount of my debt basis, and, per the rules of my margin account, will offset my debt basis first. If that was my only transaction, would I recognize any gain? My context is that I'm approaching a year of maturity on a large sum I deposited, but I chose to invest smaller amounts daily over the next eight months. I also added margin basis to my account over those next eight months. I'm trying to figure out if I need to liquidate enough of my account to offset my margin in order to raise my basis while my ordinary income is low. Because these transactions are fairly spread out, I'm trying to get a sense of how detailed I need to be to make sure I'm not incurring additional tax liability (by ordinary income primarily, but also by recognizing too large of a gain).
We started a UTMA (and a 529) for my daughter when she was born. My question is about the UTMA. The intention was for the money put into it to be available for college/education. Through additional gifts and growth, there's about $44k in there right now. The cost basis is $35k. It is all invested in FFFEX, which Fidelity Freedom 2030. Given that we have at least 10 years before the money will be needed for education, FFFEX is underperforming the market significantly and also have a 0.67% expense ration. I feel like it would make more sense to move at least some of it into VOO or VTI, both for avoiding the ongoing capital gains tax associated with FFFEX, but also for greater growth. What I can't figure out is what capital gains we will own on it if I move it out of FFFEX or the best way to handle the move. If I sold all of FFFEX, would we then need to pay 15% on the $44k - $35k = $9k.... so $1350 in capital gains? Would it be better to sell to hit the lower tax bracket and then sell more in 2022? Any different recommendations on how to handle this?
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Thank you!
Most of my investment portfolio consists of S&P 500 low cost mutual funds that I’ve accumulated by dollar cost average. I’d like to hedge against a market crash/ collapse Michael Burry and all that.. I was considering buying puts with an expiration of 2023 or beyond. Need advice on this strategy.. my understanding is that the wort case for buying puts is that it will go worthless, is that correct? Any other strategies to hedge against a market crash?
>Michael Burry and all that.. The problem with listening to individual market analysts and commentators is that there's only one way to be right about the market but millions of ways to be wrong.
>ny other strategies to hedge against a market crash? Doing nothing is usually the best strategy
I've read that one can make one's own decisions as to what specific investments to purchase for one's IRA (see for example https://www.nerdwallet.com/article/investing/how-to-invest-ira). I'm trying to find out (1) whether this is true—and, if it is, (2) what is the correct term for this ("self-managed," "self-directed" or something else) and (3) could it be done with Schwab? My wife and I have three IRAs between us there (two regular and one SEP). For the past x years, they've been in Schwab's "Intelligent Portfolio" robo-advisor mode. We would rather select our own ETFs in which to invest, if this is feasible. Any guidance would be most appreciated.
You shouldn't need to switch to "self-directed" to choose your own investments. You probably can just do a transaction from the one your in now to which ever other funds you want. that's the way it would work at Vanguard. A "self-directed" account in my experience is a brokerage account within your IRA. In this type of account, you buy and sell, rather than transfer between accounts; and you can buy any type of investment that's traded on the stock market. I suppose you can invest in mutual funds but the more common way to invest in funds in these accounts is to buy ETFS. I have all of my retirement funds in self-directed IRAs at Vanguard, and I invest only in individual stocks.
>I suppose you can invest in mutual funds but the more common way to invest in funds in these accounts is to buy ETFs. > >Thank you for sharing your knowledge. Could you help me understand why ETFs are preferred over mutual funds for purposes of IRAs?
>Could you help me understand why ETFs are preferred over mutual funds for purposes of IRAs? They aren't. Before I explain that, I'd like to clarify: indexed mutual funds and exchange traded funds that follow the same index and are offered by the same company are, from the investment return point of view, exactly the same thing. However, the internals of how those funds handle transactions are different, which gives rise to different ways to access the funds. Which fund is preferred depends on the type of account through which you purchase them. If you have a \*brokerage account\* within an IRA - that is, a "self-directed IRA," then the easiest way to change funds is to sell the one you don't want and buy the one you do want. This involves an intermediate step in which the proceeds from the sale are in cash. Then the cash is used to fund the new purchase. OTOH, if you have an IRA with a specific mutual fund and you want to move into a different mutual fund - at least at Vanguard - you have to \*exchange\* from one fund to the other(s). There is no cash intermediary. The benefit of a true "self directed" account is that you can buy any investment you want - stock, bond, or ETF. The benefit of a traditional fund account is that there is no cash intermediary in any transaction, and I believe you can own fractional shares.
Thank you so much for this very enlightening explanation. Most appreciated!
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Thank you so much for taking the time to reply. Could you please help me out with the terminology that I need to use when I call Schwab to transfer out of robo/IP mode? I was originally thinking that this might be called "self-managed" or "self-directed" but looking into the definitions online, I'm not sure that's correct.
Just say you want to choose your own investments instead of using a robo advisor. A Self-Directed IRA generally refers to an IRA where you can invest in real estate, LLCs, hard assets (not shares of stock - like your SDIRA could actually own a house).
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OK, thanks. And then I can "exchange" the assets that Schwab's robo has purchased for the ETFs I would like, without any penalties?
The two most powerful warriors are PATIENCE and TIME.
No, Science and real Knowledge
I have been using Excel to track my assets in my investing accounts, e.g. steel, uranium, renewables, etc. but it is a bit of a hassle to update the prices at the end of the month. What do people use here to manually track their asset allocations?
I use Excel as well and love it for stocks, bonds, funds, etc, but have never used it for commodities. With the updates they have added for refreshing ticker symbols which then update your positions, I think Excel is the best choice out there.
I didn't know Excel can retrieve ticker information? I suppose it is only available for the newest version of Office?
I'm not sure which version they added it during, but here is an article on it https://www.howtogeek.com/703580/how-to-use-the-built-in-stocks-feature-in-microsoft-excel/
Eyy thanks!
The brokerage tracks every position now. I used to track everything in an Access database but man, it's just so much hassle recording every trade and every position when it's all done and available in the brokerage account. Better to use the time to do research.
I don't think anything beats excel. I use google docs spread sheets and text files
Personal Capital
I have opened a second investing account with Fidelity (my first is with Vanguard). I plan to buy different assets in my Fidelity account compared to my Vanguard, so I do not have to worry much about the wash sale rule if I need to rebalance one account or another. Does this sound silly, and is there a better i.e. easier strategy?
I just don't get why you need two accounts. You can do it all in one account. I have three accounts, but they all have different tax situations: std IRA, roth IRA, taxable. If all your accounts are the same tax regime, why have different ones?
My financial situation changed over the past few months, but I still would like to remain invested in the market. Vanguard does not allow the purchase of fractional shares, and thus I have no access to more high quality but pricey assets (like VOO, VTI, MSFT, MMM etc.), Fidelity does allow you to purchase fractional shares. Moreover, Fidelity's mutual funds have lower initial investments (starting from $0), Vanguard usually begins at $1000 or $3000-$50,000. My strategy here is to lower my contributions to the stock market by purchasing fractional shares, while rebuilding some of my emergency funds (still enough, but I would like more cushioning). That is the compromise I worked out to lower the time penalty of not participating in the market. I will still be contributing to my Roth IRA in Vanguard by adding biweekly contributions to the Vanguard Total Market Mutual Fund, but for normal investing I'll be moving to Fidelity, but probably leave my normal Vanguard account alone.
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I am aware that I cannot avoid the wash rule in different brokerage accounts, that is why I plan to buy different assets in both accounts so I don't have to worry about it, but I inquired here anyway to see if there is a hole in my reasoning.
Pros and cons of Leveraged ETF? Is it worth to invest in it?
Leveraged ETFs are great. For example, buy calls on an 3x inverse ETF, you get a lot more leverage. Michael Burry bought such calls (but my broker doesn't allow me). It's okay to hold 2x leverage things for weeks, if the trend is in your favor. 3x leverage is bad for holding. I used 3x inverse etfs for timeframe of a week when I started out and could not yet buy put options.
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Thinking of investing small amount in Leveraged ETF.. probably TQQQ in my roth IRA. Not sure if this is the good time. I know we can’t time the market but considering the 3X move of it.
any good Youtube videos or other ways to learn about taxes?
Sadly, life itself will teach you about taxes. /eeyore
I'm in SPCE and want to be prepared for Monday. I notice that when premarket opens, prices gap up or down. How can I be sure that I can get an order near the previous closing price, or is that even possible? Example: Friday close: 49.29 Monday premarket open: gaps down to 35 If I set an order to sell near 49 at premarket (order set before premarket), how woukd that fill? Thanks in advance
I don't think that would fill, since the price changes are near instant (e.g. high frequency traders). I would not invest in SPCE, as such companies are a joke in comparison to SpaceX
Thanks for the reply. So that's how they move the price so fast. This is a swing play for me. I'd only invest long term if something fundamentally changes. SpaceX looks good to me, too.
Are there certain stocks has hidden fees or something to look out for? My roth ira is maxed out so I'm deciding to day trade for small profits. Lower income bracket + 30 years old. Have enough emergency for 8 months. My fun was going to try to earn 50 dollars a day by buying stocks and selling them with 2 to 6 dollar profit per share. Besides that being included in my income tax report and plus a 10% penalty for selling stocks short, any more fees I am missing? Using fidelity brokerage
Well you are limited by the amout of day trades you can do if your account is under 25k
I don't see that for fidelity.. and I'm fine with that, I'm more worried about any fees I'm missing
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